advice Starting a Domain Business (50-100k capital)

[SeverusScrape]

Hi,

I am exploring the idea of starting a business of domain investing with the hope of generating 10-20k per month in the first 2-3 years.

I don't have much experience as a domainer in domain buying and selling but do have some limited exposure due to a background in digital marketing, building websites and buying/selling domains in a niche. I like to think

My questions after reading many start your domainer business threads here is if the starter changes when you have 50-100k (USD) in capital? How would your strategy change? What would you invest in? Is 10-20k (avg) realistic after 2-3 years?

Any thoughts appreciated.

 

[twiki]

Is 10-20k (avg) realistic after 2-3 years?

Only if you're very, very good at this, but other avenues would be quicker (some white powder....? Just joking, of course)

Like managing to somehow buy undervalued 4-5 fig domains and sell them for more, rather fast (1-2 year window).

With no or limited experience, chances are high that you're going to make losses instead.

Domaining is a lot of work and not like money printing. And needs time. And you don't jump into it like that.

You start by buying small number of very well pinpointed domains. So it's more about skill than anything else I believe.

I used this kind of approach in my first year. Purchased 30K worth of domains, ended ditching half of it when renewal came. I covered the loss and made a small profit. Was this wise? Absolutely not, but I was impatient to learn fast and I knew (from experience) I'm going to burn like half of the money. (Edit: Important note, I felt like a fish in the water when domaining, I had trust in my skills and fast learning and this matching very well my skillset; so this was actually a very good result for the first year. I often see guys down 10K and in 5 years they haven't sold about anything... so that's another possible scenario)

With that budget, I think your 10-20K revenue after 2-3 years is completely unrealistic. You probably have to buy good domains today and wait more years to sell, in order to achieve this. Some successful domainers have domains for 10-20 years that sell today for significant profit.

If you focus on the bulk of the market (3 to 4 fig), I see your potential profit at 40% to 75% per year depending on your skill, so at 100K investment that's probably going to be more like 3...5 K per month tops.

Still I'd like to hear more opinions on this as well as each domainer is different.

 

[knortal]

Target : 20k per month in premium domain sales revenue.

At average price of 2000$ per domain, you have to sell 120 domains per year to achieve sales of 240K per year.

With average of 5% of your domain portfolio getting sold each year, you need an inventory of 2400 domains.

Now how to build a domain portfolio that can scale in 2 years to 2400 Domains with yearly sell through rate of minimum 5% @ avg price of 2k ?

Is my math correct ?

 

[twiki]

Target : 20k per month in premium domain sales revenue.

At average price of 2000$ per domain, you have to sell 120 domains per year to achieve sales of 240K per year.

With average of 5% of your domain portfolio getting sold each year, you need an inventory of 2400 domains.

Now how to build a domain portfolio that can scale in 2 years to 2400 Domains with yearly sell through rate of minimum 5% @ avg price of 2k ?

Is my math correct ?

Probably so (edit: math correct), although math can be expanded more than that and I bet you will see this further in the thread.

Important note, 10-20K per month IN PROFITS, not in revenue. And 5% sales? that's a crazy %, I'm currently at 2% and this is about average.

(edited for clarity)

 

[WhoaDomain.com]

It is not easy. Good luck.

There will be months where you don't make money . Unless your plan is to flip and auction liquid domains. I.e. short 3L.coms and 4L.coms.

"On paper" your "idea" to make the kind of money you are expecting is a bit optimistic.

You have seasoned pros on here who don't even make the money you are expecting on the regular.

But....you do have those who make $150,000 in on deal or two.

So it is very erratic. Sales like those big ones cover months even years of no sales.

Already I can tell you have no patience when your expectations.

You'll need to be more realistic with your expectations.

And then plan accordingly.

 

[Silentptnr]

First figure out what type of investor you will be. Long term hold with passive selling? Working every day doing outbound, domain development, etc?

The best way to achieve your goal would be very wise investment in building a small but quality portfolio of domains.

Then develop some to generate revenue.

I suggest you dip your toe into the pool before you swan dive in.

 

[Joshh71390]

Those are crazy numbers i think it is very possible with that capital , but the timeframe just isnt there, it takes a little time to perfect your ability to find the names that work best for you, / ontop of needing to buy up enough quality names / and start selling them all at once is a little bit of a stretch.

If getting solid returns is your number 1 goal then maybe go after elite names. 1 word quality, buying like 2 or 3 of them total and just putting some solid effort into outbound on those few names... and then over time branch out as you go.

• say you bought a 1 word for 100k / and held for a few years and sold it for 600k because a major corp is selling a product with your name and wants to buy the domain. this will equal out to be in your range but just not payed out every month if that makes sense.

Seeeing as you know marketing / webdev / and now domaining / maybe use ths oportunity to build a business around sites that can generate income and eventually be sold off for profite to cycle back in / that might be another springboard

 

[twiki]

(edit: wrong post, sorry)

 

[gilescoley]

This is far too ambitious if your plan is to just buy and sell names (no development)

It is not easy to sell names and some months you will sell and other months you wont. Dont plan making that amount every month, it more than likely wont happen.

Set smaller goals, invest $1K-3K and buy a few decent names (less than 5) and then try and sell them for decent profit to end-users. If you do manage to sell them, reinvest that money into more names. If you dont have a good understanding of what makes a name valuable and how to find end-users, you will end up with a lot of names that wont sell. I would spend a few months reading this forum before buying any names. Check our Namebio.com and DNJournal.com to see what type of names sell.

Check and make sure you have a whole list of potential buyers before buying a name
Don't hand register any names, email owners of decent names and find a bargain.
Don't buy names and then park them or put up a landing page. Email each potential buyer individually and ask if they are interested.
Biggest mistake domainers make is thinking the buyers will come to them after buying an average domain. This wont happen unless you have really good names.
Its always better to spend $100, $200 or $500 on 1 or 2 names that will at least sell, rather than 50 or 100 crappy names that will end up expiring. Quality of Quantity
DO NOT fall for the new domainer regging frenzy and buy 100 names thinking you will sell them all, it wont happen, buy 1-5 names and try and sell them, if you cant sell them, dont buy more, research and learn what you are doing wrong.
Focus on a niche you are familiar with
Focus on getting the best .COM names in that niche
Shorter is better in domains, most of the time anyway
Dont mix numbers and letters
Stay away from hyphens
Stay away from company names/Trademarks

Hope that helps
Good luck

 

[lock]

Abracadabra sounds so easy first you have to work out what others want and then get them to give you money.

 

[garptrader]

Would I advise a friend who wants to get in shape to implement an exercise program? Yes because I have been exercising regularly for decades and feel it promotes health.

Would I advise a friend who likes to travel but is apprehensive about visiting Colombia to visit Cartagena, Santa Marta or Medellin? Yes because I have been to Cartagena three times, Santa Marta once and have seen dozens of videos on Medellin so Medeliin is number one on my list of places to visit after corona.

Would I advise a friend to invest tens of thousands of dollars in domain names for resale? No because the odds are they would lose most of their money as well as hundreds of hours of their time which could have been invested in more productive ventures. There are occasional sales in this industry which attract newbies who view domains as easy money. The reality is domains are an easy way to lose money because 99.9% of companies will go out of their way to avoid paying for an aftermarket domain yet will spend many thousands of dollars on SEO and lead generation services, Google Adwords, TV, magazine and billboard advertising, website development, etc. Turning a decent domain into a business is no guarantee of success but probably has a better ROI than managing the typical domain portfolio.

 

[johnn]

There are only a handful of people from this forum can make that much per month.
It requires knowledge, capital and marketing skills.

I am not saying it's impossible but it's impossible for newbies.

 

[biggie]

My questions after reading many start your domainer business threads here is if the starter changes when you have 50-100k (USD) in capital? How would your strategy change? What would you invest in? Is 10-20k (avg) realistic after 2-3 years?

Hi

it depends on where and what you purchase, and cost of each purchase
can also depend on, if those purchases have traffic or not.

you also have to consider, that as you attempt to sell, what are the "replacement" values, to acquire similar domain in your portfolio.

once you sell a name and everybody finds out about the sale, then the rush is on to acquire similar/comparable domains....which drives up the "replacement" cost to the portfolio, and increases competition in aftermarket.

on other hand
high sales reports can increase values overall for a category or keyword, which could be beneficial to your holdings.

still, with $50K > $100 in capital, one could actually purchase some quality domains, that would appeal to a wider audience.
However, unless one knows the difference between a premium domain and one that's premium priced, then you could loose much of that capital on unsellable or overpriced domains.

one last note:
when a newbie posts how much $ they got to spend,
typically a shark will be waiting, to take a bite out of your pocket.

just saying....

Good luck!

imo...

 

[coolhands]

Start with $5k-15k , And try to make atleast $26k as Profit.
If you Failed, Then you will Failed too with a $50k-100k in capital.


Briefly, Start with small investment, and try to make success with it, Until you get in the game then you can increase your investment, step by step..

Good Luck,
CoolHands

 

[davidc1]

First, try to be in profit and dont count in luck to

 

[Martins B.]

I feel like this might be a little too ambitious.

 

[easywebdomains.net]

I too come from a Digital Marketing background. It isn't going to help that much. Yes you'll have an appreciation for Keyword volume and CPC rates, and that will help somewhat with generic and keyword domains, but it is only a part of the puzzle.

How good are you at valuing a domain name for End users and the Wholesale market? If your answer to that isn't excellent then I would start very slow. Otherwise how do you know it's worth buying at the price on offer? I started studying on May 2nd and so far have only bought a few names for testing purposes only.

It's very easy to buy, it's very hard to sell at end user prices. I would wait until you just "know" a domain is at a good trade-able price before committing serious cash.